Rishi Sunak announces new business rates revamp in Budget 2021

RISHI Sunak announced an overhaul of business rates in today's Autumn Budget 2021.

Business rates are a tax that firms such as shops, offices, pubs and factories pay to their local council.

Companies - particularly high street retailers - have repeatedly called for an overhaul of the system, complaining that it's outdated and unfair.

Today, the Chancellor ignored calls from some businesses and lobbying groups to scrap the tax altogether.

But he did say the government will reduce the burden of business rates in England by £7bn over the next five years.

A key criticism of the current system is that revaluations are too infrequent, meaning that business rate bills are tied to out-of-date property values.

How much each business pays is based on the rental value of the property from 2015.

The Chancellor said today that from 2023, there will be revaluations every three years.

He said: "It would be wrong to find £25bn in extra borrowing, cuts to public services, or tax rises elsewhere, so we will retain business rates, but with key reforms to ease the burden and create stronger high streets."

The business rates multiplier will be frozen in 2022 to 2023, meaning bills will be 3% lower than without the rise.

🔵 Read our Budget 2021 live blog for live updates

From 2023, no company will face a higher business rates bill for making property improvements for 12 months after the work is completed.

This is expected to encourage businesses to adopt green technology such as solar panels.

Mr Sunak also announced a 50% discount for business rates to retail, hospitality and leisure firms for a further year.

Chris Sanger, head of tax policy at EY, said: “With revaluations moved to every three years, the Chancellor has improved the system.

"However, beyond the immediate cut, this still leaves retailers paying almost five times more in business rates than their share of the economy. 

"The half price offer for the next year will help, but does not address the long-term issue.” 

Meanwhile, the cost of a pack of cigarettes will go up to £13.60 from 6pm this evening after the Chancellor hikes tobacco tax.

The price of a pint will be 3p less from midnight after Mr Sunak scrapped a planned alcohol duty raise.

Here's everything you need to know about booze tax changes and what it means for you.

Millions of people are set for a £1,000 pay rise as the Chancellor has confirmed he will hike minimum wage to £9.50 an hour in his Budget.

We pay for your stories!

Do you have a story for The Sun Money team?

Email us at money@the-sun.co.uk